The great migration happens once again
It is almost 8 months to the day that the SpiritSwap community embarked on the great migration to boosted farms. Just like the seasonal movements of wild animals, we wild degens must also prepare to make haste onto greener pastures.
With the looming deployment of V2 in the crosshairs, Soully, the great creator of all, waits in anticipation to unleash his next generation of grazing pastures for our eager yield farmers to enjoy.
This article is written to provide our community with a few pointers surrounding LP migration, for when V2 is released.
Usually migration of liquidity is typically done with the assistance of migration buttons, providing community members with an easy and seamless transition over to new pools. Unfortunately this is not the case for SpiritSwap V2. The reason being is that due to the AMM types changing entirely. SpiritSwap V2 will no longer be using a UniV2 AMM for its vAMM architecture. As such, mitigating from one AMM type to another is not interoperable. As such community members who wish to participate in SpiritSwap V2 will have to migrate their liquidity manually.
Before outlining a step by step process to facilitate such a migration, it’s important to note and remind you all that the initial 2 week public beta period will have restricted emissions as per the DAO community vote that was passed last week. Essentially this means that only 10 % of emissions will be directed to V2 for this time period. The main reason for this restriction is for security. Despite having a double audit and peer review from the Fantom Foundation, protection of user funds is of the utmost importance. By restricting emissions in such a manner over the testing period and limiting incentives by 90% an informal cap is put on LPs in order to take such precautionary measures. As such, those who choose to participate in V2 should logically migrate no more than 10 % of their LPs into SpiritSwap V2 LPs. Once the testing period is over and there are no issues, a full migration of emissions can occur and remaining V1 LPs with it. Thanks to our new master router, trades will hop through both V1 & V2 LPs so slippage won’t be an issue.
It is also important to note that V2 AMMs won’t be active right away. Due to liquidity still needing to be migrated, routers will hop through V1 LPs until enough liquidity is formed in V2 LPs for the routers to validate doing so. Due to how the gauge proxy works, emissions for V2 LPs won’t start emitting until THE DAY AFTER the next distribution EPOCH (11/10/22).
When migrating you simply need to :
1. Go to your respective farms and first remove your LP tokens from the farm. As migrating only 10 % of your assets over to V2 is recommended, you simply need to do some basic division. In this example you can see the user has 502 LP tokens in the farm. 502 (total LP tokens)*0.1 (10%) = 50.2 LP tokens. Select withdraw and type in 50.2 LP tokens (10 % in this example).
2. Once you have pulled 10 % of your LP tokens from the V1 farm, you can now go to the liquidity page on V1 and remove the single assets. Simply select your liquidity pair, click remove
At this point you can remove 100 % (remembering you have already accounted for taking 10% of your overall liquidity out of the farm).
3. Once removed you will now have single held assets in your wallet which previously comprised the liquidity pool you withdrew from. Next you will head over to the new SpiritSwap V2 site (link yet to be provided) and make a new SpiritSwap V2 vAMM LP over there.
Click on classic V2 liquidity, Enter in your tokens (the same amount that you withdrew from V2) and click add liquidity.
NOTE: Rather than having to take the new V2 LP over to and deposit into farms once the LP is created, you can use our cool new “Zap to Farm” feature to cut the effort for you. This will automatically zap your LPs into its respective farm and automatically put your assets to work for you.
4. If you wish to go the traditional route and not Zap to farm, you can head over to our farms page and deposit your LP tokens over there.
Hey presto, you have migrated your V1 LPs over to V2 and are farming just like before. The whole process should take no more than 5 minutes.
As V2 LPs are entirely new, they are yet to be seeded. This will mean people who are first to enter into fresh V2 LPs that are already existing on SpiritSwap V1 or other DEXs, will need to take price matching into consideration. This is to avoid setting an incorrect rate on V2 and face potential arbitrage from bots. If you are the first to set the price in Spirit V2 LPs it is recommended you use an aggregator to identify the price.
For example, if you are the first to set the price for Spirit/FTM LP on SpiritSwap V2 it is recommended you go to an aggregator like Unidex. Once there, you can type in the amount of single assets you want to add to your SpiritSwap V2 LP (as though you were going to swap them on Unidex) and this will give you the ratio of tokens you need to add to create the new SpiritSwap V2 LP at market rate. In the example below, you can see that if you were wanting to add 1000 FTM tokens paired with SPIRIT, then you would want to pair this 1000 FTM with 20,696 SPIRIT tokens. If the LP already exists I.E someone has already established the LP, arbitrage bots would have already balanced out any price discrepancies and you can add your two assets at the rate automatically determined by the LP.
There you have it, a quick simple overview on how to migrate your SpiritSwap V1 LPs over to V2. We look forward to communicating more information to you about the public beta launch in the coming days.